Does financial wellness impact your health?

Can living in poverty make you sicker and prevent you from living longer? Recent research on the adverse health effects of poverty shines a light on the physical impacts of financial stress and raises the question: what can healthcare organizations do to improve the health outcomes of patients who are struggling with the financial burden of their care?

The shift in the landscape

Whole person health is a healthcare delivery model that looks at a person’s wellness as a sum of a number of interconnected areas including biological, behavioral, social, and environmental, and seeks to empower people to achieve better health outcomes by looking at all of these. It focuses on restoring health, promoting resilience, and preventing diseases across a lifespan. Patient centricity means putting the needs of the patient first, to respectfully and empathetically achieve the best experience and outcome for that person.

Over the last two decades, we have shifted from the traditional approach that designs health products and services on behalf of others to a more collaborative philosophy. There are two main ideas circulating in the healthcare space that reflect that change in perspective: whole person health and patient centricity.

Health is a complicated problem, one that is constantly evolving. Up until now, whole person health and patient centricity have focused on designing more patient friendly language, treatment adherence, transparent processes, and improving patient experience. As we work to gain new insights and work to unravel this complexity, we are discovering that there are some unaddressed pieces of the wellness puzzle. Human-centered design methods can help us unearth some of the root causes that may have gone previously unnoticed. Financial wellness is one of them. Terms like financial health and financial wellness are cropping up as symptoms of a largely unaddressed patient need. They can help guide human-centered design approaches and help us imagine a fuller picture of whole person health.

What is financial wellness?

It is defined by the ability to meet your financial needs, a feeling of security about your financial future, and the freedom to make choices that allow you to enjoy life. This is no passing trend, and we see many financial institutions like the CPA launching guides to help Canadians achieve financial wellness.

What exactly does financial wellness have to do with health? Recent studies have revealed that income has an impact on health conditions, including their severity. There is a direct correlation between negative health conditions and negative financial wellness. In the US, 43 million people are dealing with unpaid medical debt¹, which experts are beginning to see as impacting their health outcomes. This raises the question: should care providers be screening for poverty or financial vulnerability?

We know that financial health is directly connected to physical health. To become truly patient centric, organizations should consider financial burden as a piece of the care puzzle.

A social determinant of health

We have all experienced financial stress at some point in our lives. What is shocking is just how much of an effect chronic financial stress has on physical health outcomes. A cross-national population study² of UK and US older adults found that wealthy people have nine more years of disease-free life after age 50 than their poorer counterparts. That’s almost an entire decade. Currently, an estimated 41% of the US population is living with chronic medical debt, with 12% carrying medical debt over $10,000³. For a vast number of people, that kind of debt is overwhelming–and now we are starting to see how this plays out directly on a person’s health.

Global organizations like the World Health Organization have flagged social determinants of health (SDoH) as “more important than health care or lifestyle choices in influencing health.”⁴

WHO Social Determinants of Health:

• Income and social status
• Employment and working conditions
• Education and literacy
• Childhood experiences
• Physical environments
• Social supports and coping skills
• Healthy behaviours
• Access to health services
• Biology and genetic endowment
• Gender
• Culture
• Race / Racism

Financial wellness is not simply an issue of affordability but also an issue of equity. It is impossible, therefore, to talk about diversity, equity, and inclusion in healthcare without addressing the financial part of the equation. The term financial toxicity has emerged in recent years to address how financial insecurity affects patients. Financial toxicity is defined as financial distress caused by out-of-pocket expenses related to treatment. Some healthcare organizations are already screening for this risk factor as it relates to cancer care where the risk of financial distress is high due to the fact that many patients are unable to work as a result of their treatment. Some cancer survivors report spending more than 20% of their annual income on medical care.⁵ Healthcare organizations must consider screening for financial vulnerability if they are committed to fixing the health equity issue.

The challenge ahead of us

What can healthcare organizations do to drive meaningful change in this area of health equity? One possible solution roadmap is the establishment of MFPs or Medical-financial partnerships. These cross-sector collaborations between healthcare systems and financial services organizations attempt to improve people’s health outcomes by tackling financial challenges. These collaborations focus on financial literacy and connecting people with financial resources they may not have been aware of before.

New studies are attempting to measure the impact of such interventions. A recent collaboration between physicians, researchers, and a financial literacy organization looked at the implementation and impact of an online tool used in primary care to improve patient access to financial benefits.⁶ An interesting case study out of Philadelphia found that “patients who received financial counseling had more savings, reported to be in better health, and were more likely to adhere to health care plans.”⁷ This two-year project included staff training on MFPs and a dedicated financial counselor for 300 patients. The keys to their success were finding the right local partners and getting buy-in internally.

Looking at earlier, proactive interventions can help healthcare organizations impact financial wellness and as a result, improve health outcomes before poor finances can have negative health impacts. They can do this by investing in MFPs, and partnering with not-for-profits and payers in the healthcare space to treat the root cause of the problem, not just the symptoms. Approaches like this can also tie in and enhance already ongoing DEI efforts within organizations.

Read about our work in helping financial empowerment champions deliver critical services to low-income Canadians.

Health and wealth are inextricably linked. Individuals suffering from chronic financial stress are living significantly shorter, lower-quality lives than those with ample financial resources. People living in poverty are also less likely to seek timely care and follow through on treatment plans. Financial wellness is a root problem that impacts the entire healthcare system. Other ongoing issues plaguing this sector, from treatment adherence all the way to issues of diversity, equity and inclusion, are directly linked to a person’s financial situation. They are also costing the healthcare sector hundreds of billions of dollars each year.

By looking at these problems with a holistic perspective, we can start connecting the dots and getting to the root cause of the problem. Human-centered design, the discipline that puts real people at the center of the development process is the key to finding solutions that stick.

References

1 —Khazan O. What Happens When You Don’t Pay a Hospital Bill. The Atlantic. 2019 August 28. https://www.theatlantic.com/health/archive/2019/08/medical-bill-debt-collection/596914/
2 —Paola Zaninotto, PhD, George David Batty, PhD, Sari Stenholm, PhD, Ichiro Kawachi, PhD, Martin Hyde, PhD, Marcel Goldberg, PhD, Hugo Westerlund, PhD, Jussi Vahtera, MD, Jenny Head, MSc, Socioeconomic Inequalities in Disability-free Life Expectancy in Older People from England and the United States: A Cross-national Population-Based Study, The Journals of Gerontology: Series A, Volume 75, Issue 5, 2020 May, Pages 906–913, https://doi.org/10.1093/gerona/glz266
3 —Lopes L, Kearney A, Montero A, Hamel L, Brodie M. Health Care Debt In The U.S.: The Broad Consequences Of Medical And Dental Bills. Kaiser Family Foundation. 2022 June 16. https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/
4 —Social determinants of health. World Health Organization. 2023. https://www.who.int/health-topics/social-determinants-of-health#tab=tab_1
5 —Financial Toxicity (Financial Distress) and Cancer Treatment (PDQ)–Patient Version. National Cancer Institute. 2019 September 20. https://www.cancer.gov/about-cancer/managing-care/track-care-costs/financial-toxicity-pdq#_223
6 —Aery A, Rucchetto A, Singer A, et al. Implementation and impact of an online tool used in primary care to improve access to financial benefits for patients: a study protocol. BMJ Open 2017;7:e015947. doi: 10.1136/bmjopen-2017-015947. https://bmjopen.bmj.com/content/7/10/e015947
7 —Integrating Medical and Financial Health. National Nurse-Led Care Consortium. 2018 August. https://nurseledcare.phmc.org/images/pdf/technical-assistance/MFP-Webinar-Resource.pdf